Toshiba's move to switch accountants reflects a desperation to avoid delisting. The crisis-stricken Japanese group may ditch the Big Four auditor it hired only last year, Reuters reported on Wednesday, which might force the firm to risk using a second-tier player. That is an ugly look for a firm that badly needs to win back the trust of regulators and investors.
Toshiba is doing all it can to avoid crashing out of the public markets, which would make the stock much harder to trade and thus force many big investors to sell. Toshiba's many individual fans in Japan – in total, it has nearly 400,000 shareholders, Eikon shows – would be left with near-worthless paper.
There are three hurdles. First, a Tokyo Stock Exchange review has to conclude managers have fixed long-running shortcomings in internal controls. Second, the company must claw its way out of negative equity by March – hence the 2 trillion yen-plus ($18 billion) sale of its memory-chip business. And third, it must file full-year results promptly: ideally by May 15, late June at the very latest.
At first blush, parting company with PricewaterhouseCoopers Aarata seems an odd response. The local arm of PwC was brought in only last
But PwC and Toshiba are feuding. The bean-counters wanted to probe the previous financial year at Westinghouse, the U.S. nuclear unit that is now in bankruptcy protection, sources have told Reuters – something Toshiba opposed. And it withheld an opinion on Toshiba's most recent results, even after weeks of delays. The standoff created a risk Toshiba might not be
Firing PwC in this way could unsettle the exchange too. But Toshiba is out of attractive options.
Commentary by Quentin Webb, Asia financial editor at Reuters Breakingviews. Follow him on Twitter @qtwebb.
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